Farmer protests over tax changes ‘could just be the start’, Scottish politicians say

Protests next week over changes to inheritance tax for farmers “could just be the start” of a backlash against the UK government, Scottish politicians have warned.

Under plans announced in the Budget, there will be new taxes for farms worth more than £1 million, prompting a furious response from the industry.

The National Farmers’ Union (NFU) is planning a mass lobby of MPs on Tuesday, with 1,800 members gathering, including a delegation of 25 from NFU Scotland.

A separate rally is also taking place on the same day in central London. The number of expected protesters increased so much that the location has been changed and the rally will now take place opposite Downing Street.

Prime Minister Sir Keir Starmer has defended the inheritance tax changes, insisting most farmers will be unaffected and that the government just needs to “keep explaining” how it will work.

But former farmer Douglas Ross said the protests showed the scale of the anger at the government, and warned Britain’s food security could be at risk if more strikes happen.

The MSP and former Scottish Tory leader told The Scotsman: “The response I’ve heard from farms has been consistent and overwhelming. They are angry and they are worried about what Labour’s changes will mean for them and our food security.

“If you have no farmers, you have no food. Labour have to realise their plans will force farmers to leave the industry and they won’t be replaced.

“I expect Tuesday’s rally to be huge, and that in itself is telling. It’s not easy for farmers just to nip to London, animals still need milked and fed. Most farmers don’t take holidays because it’s difficult to juggle that with duties on the farm, but so many are going to go to great lengths to ensure their voice is heard by the Prime Minister and every Labour MP backing this budget.

“And this could just be the start. If Labour refuse to listen and don’t U-turn this deeply damaging policy then farmers will need to look at other ways for the government to take notice. Just across the Channel in France we have seen the success of farmers coming out in big numbers to demand change from their government and I know that our own farmers are equally passionate about protecting their industry.

“This is a fight we need to win for our farmers and the farmers of tomorrow, but also for the food security of our country. That’s why I’ll continue to do everything I can to support our farmers when they need us most, because their efforts support us all day in, day out.”

The inheritance tax changes for farming businesses in the Budget limits the 100 per cent relief for farms to only the first £1 million of combined agricultural and business property.

Farmers across the country are facing increasing uncertainty in the wake of the UK Government’s Autumn budget changes to tax | Katharine Hay

For anything above that, landowners will pay a 20 per cent tax rate, rather than the standard 40 per cent rate of inheritance tax applied to other land and property.

Liberal Democrat MP Alistair Carmichael, chair of Westminster’s Environment, Food and Rural Affairs Committee called for more respect and understanding for farming communities.

He said: “After the competing claims of recent weeks over the Budget, and inheritance tax in particular, it is understandable that many farmers feel they are at the end of their tether. They have the right to make their voice heard though as with any protest, I am sure they will not want to alienate the people whose support they need.

“We should all be mindful not to let this become another polarising culture war, as some in the Tory party seem intent on making it. That will not serve farmers and crofters any better than the current state of affairs. People in towns and cities need farming communities to thrive just as surely as the other way around – that is the message that needs to be heard and understood.

“Above all we need those with a hand on the levers of power to reassess the answers they have given to date and the depth of concern amongst farming communities. When the DEFRA Secretary comes before my committee on Tuesday I hope his answers will reflect this.”

Treasury data shows around three quarters of farmers will pay nothing in inheritance tax as a result of the changes announced in the Budget.

But farmers have challenged the figures, pointing instead to data from Defra which suggests 66 per cent of farm businesses are worth more than the £1 million threshold at which inheritance tax will now have to be paid.

On a visit to North Wales on Friday, Sir Keir said: “I know some farmers are anxious about the inheritance tax rules that we brought in two weeks ago.

“What I would say about that is, once you add the £1 million for the farm land to the £1 million that is exempt for your spouse, for most couples with a farm wanting to hand on to their children, it’s £3 million before anybody pays a penny in inheritance tax.

“And that is why the vast majority of farms are going to be totally unaffected by this. And it’s really important we get that through.”

He added: “So we just need to keep explaining how that works, because I know it’s caused some anxiety.”

A UK government spokesperson said: “The government’s commitment to our farmers remains steadfast. It’s why we have committed £5 billion to the farming budget over two years – more money than ever for sustainable food production. 

“We understand concerns about changes to Agricultural Property Relief but the majority of those claiming relief will not be affected by these changes. Around 500 claims each year will be impacted and farm-owning couples can pass on up to £3m without paying any inheritance tax. 

“This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on.” 

President Martin Kennedy of NFU Scotland, had previously accused Labour of “pulling the rug” from under the feet of farmers.

Speaking at AgriScot 2024 this week, he said: “Sadly, given the direction of travel made clear by this new Labour Government in the budget on the 30 October, they have shown a real lack of understanding of how the agricultural industry operates. Not only have they pulled the rug from under our feet by imposing impossible tax burdens on family farms, something they said they would not do, but they have also completely washed their hands of an over 50-year-old ring fenced budget safety net put in place to support food security.

“Given Labour’s welcome strapline that food security is national security, it’s now very hard to understand their thinking. More importantly, it’s very easy to understand they know nothing at all about what all farmers and Crofters deliver for the whole of society.”